Avarda Bank AB · OMXSTO:AVARDA
Avarda Bank AB — TF Bank — Q1 2021 Earnings Presentation
26 slides from Avarda Bank AB's earnings presentation, 2021
Slide 1: 1st Quarter 2021 Result Presentation
1st Quarter 2021 RESULT PRESENTATION
Slide 2: Highlights January – March 2021
HIGHLIGHTS JANUARY – MARCH 2021 • Loan book growth 6%*, despite pandemic restrictions • Operating profit 79 MSEK, positive trend since Q2-2020 • Payment solution launched for Boozt 6th of April • German credit card portfolio has increased by 31% YTD • New forward flow contracts in Norway, Finland an
Slide 3: Consumer Lending
CONSUMER LENDING • Diversified portfolio with Nordic base Share of TF Bank's loan book Share of TF Bank's operating income • Product offering tailored for each market - Average loan size on book of SEK – 58,000 72% 66% - Tenor typically between 12 and 60 months • Marketed through direct channels, ow
Slide 4: Ecommerce Solutions
ECOMMERCE SOLUTIONS • Boozt.com, a fast growing Nordic e-commerce Share of TF Bank's loan book Share of TF Bank’s operating income champion, decided to implement our ecommerce initiative Avarda’s payment (BNPL) solution across all their web shops 17% 22% • Digital payment solutions offered in the No
Slide 5: Credit Cards
CREDIT CARDS • Target group is German and Norwegian Share of TF Bank's loan book Share of TF Bank’s operating income customers • Simple and transparent offering – gold card with no fees 11% 12% • Different income profile compared to consumer loans - Starts low – gradual build-up of income • Addressa
Slide 6: Loan Book Growth
LOAN BOOK GROWTH 10 000 24% 9% • TF Bank: Growth in Q1 = 9% (+3%*) 9 000 - Year-on-year 24% (-3%*) 8 000 7 000 • Consumer Lending: Q1 = 7% (+4%*) SEK million 6 000 - Year-on-year 13% (-2%*) 5 000 4 000 • Ecommerce Solutions: Q1 = 7% (+1%*) 3 000 - Year-on-year 27% (-9%*) 2 000 • Credit Cards: Q1 = 2
Slide 7: Growth and Diversification
GROWTH AND DIVERSIFICATION Sweden ▪ Focus on profitability and e-commerce. Breakthrough deal with Boozt.com. Norway ▪ Continued positive long term outlook on the Norwegian economy. Focus on growth and margins. Positive signs in e-commerce. Loan book Finland ▪ New rate cap of 10% until Q3 2021 for co
Slide 8: KPI – Lower Net Loan Loss Ratio
KPI – LOWER NET LOAN LOSS RATIO Operating income* Net loan losses** Operating expenses 250 238 25,0% 70 8,0% 100 95 98 60,0% 234 218 61 62 62 213 210 60 60 90 85 60 81 80 50,0% 200 20,0% 80 6,0% 50 70 40,0% 40,6% 40,9% 150 SEK million 15,0% 60 38,9% SEK million 37,8% 38,1% SEK million 40 4,0% 50 30,
Slide 9: Positive Trend for Operating Profit
POSITIVE TREND FOR OPERATING PROFIT Operating profit* 80 77 79 • Operating profit Q1-21 vs. Q1-20, +8%* 73 72 70 70 ‒ Higher result from Q2-2020 ‒ Main driver: Segment Credit Cards 60 ‒ Return on assets, 3,0% 50 SEK million • Earnings per share Q1-21, 2,84 SEK 40 ‒ Lower income tax rate in Sweden 30
Slide 10: Consumer Lending: Stable Quarter
CONSUMER LENDING: STABLE QUARTER Operating profit* • Operating profit Q1-21, +73 MSEK 80 72 74 72 73 ‒ Lower income margin in Q1 70 66 ‒ High efficiency, C/I ratio 28% 60 ‒ Return on assets, 3,7% 50 • Lower net loan loss ratio, 2,7% SEK million 40 ‒ Gradually improved credit quality 30 ‒ New forward
Slide 11: Ecommerce Solutions: Investments
ECOMMERCE SOLUTIONS: INVESTMENTS Operating profit • Operating profit Q1-21, +11 MSEK 16 ‒ Higher OPEX ahead of new volumes 14 14 ‒ Improved credit quality 12 11 ‒ Return on assets, 2,4% 10 10 10 • Payment solution delivered to Boozt SEK million 8 ‒ Investments in Q1-21 (IT and OPEX) 6 6 ‒ Higher inc
Slide 12: Credit Cards: Positive Trend
CREDIT CARDS: POSITIVE TREND Operating profit • Operating profit Q1-21, -5 MSEK Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 0 ‒ Portfolio growth – higher income ‒ Higher marketing costs and more employees -2 ‒ Return on assets, neg -4 • Improving credit quality in Germany SEK million -5 -6 -5 ‒ Upfront provisions
Slide 13: Solid Liquidity Position
SOLID LIQUIDITY POSITION Deposits from the public 10 000 9,640 • Retail deposits in 4 markets 9 000 ‒ Germany (SEK 5.4 billion) 8 000 ‒ Norway (SEK 3.0 billion) 7 000 Germany 5 403 ‒ Sweden (SEK 0.9 billion) SEK million 6 000 ‒ Finland (SEK 0.3 billion) 5 000 ‒ Fixed-term deposits: 31% 4 000 Liquidi
Slide 14: Capital Position in Q1
CAPITAL POSITION IN Q1 16,2% T1+T2 16,2% 13,8% • Lower total capital ratio partly due T1 13,8% 12,6% Headroom 4,4% to temporary T2-effect Headroom 4,3% • Negative impact from phase-in of Headroom 4,6% T1+T2 11,8% IFRS 9 provisions in Q1 12,6% T1 9,5% T1 9,5% • Positive impact from lower CET1 deducti
Slide 15: Ecommerce Solutions – Rapid Growth
ECOMMERCE SOLUTIONS – RAPID GROWTH • Unique position within white label – focus Strong growth over past 12 months on value added services by Transaction Active merchants understanding the merchants needs and volume +63% +51% close cooperation SEK 3,7bn 216 • Three main offerings to merchants: Checko
Slide 16: Signing of a New Major Partnership – BoozтPay
SIGNING OF A NEW MAJOR PARTNERSHIP – BOOZTPAY • Stand alone Avarda “buy now – pay later” options. • Avarda afterflow integrated in Boozt channels/app. • Avarda Marketing tools – Boozt in control of marketing in all channels. • Avarda Return flow – 30 days invoice to improve customer journey. Leading
Slide 17: Looking Ahead
LOOKING AHEAD • Intention to announce new financial targets – H2 2021 • No visible deterioration in credit quality – the positive underlying trend is likely to continue • Covid-19 - Lockdown in several markets leads to lower demand – especially visible for German credit cards • Secured loans – pilot
Slide 18: Q&A Session
Q&A Session 18
Slide 19: Appendix
Appendix 19
Slide 20: Corporate Profile
CORPORATE PROFILE Our Products Our Geographical footprint Operating with modern and scalable We serve customers in the Nordics and infrastructure offering our retail customers around the Baltic sea online consumer loans, deposits and credit cards. For retailers we offer leading ecommerce and brick-a
Slide 21: Long Track Record of Profitable Growth
LONG TRACK RECORD OF PROFITABLE GROWTH Long experience and proven Strong track record on growth business model and profitability • 30 years+ experience from Loan portfolio consumer finance industry 9 000 1 000 • 8 000 900 Highly profitable core markets with 7 000 800 proven model for geographical 6
Slide 22: Financial Targets and Dividend Policy
FINANCIAL TARGETS AND DIVIDEND POLICY If the macroeconomic situation continues to stabilise the Board of Directors intends to resolve on new financial targets during the second half of 2021. Currently TF Bank has the following target: Capital structure All capital ratios shall exceed the legal requi
Slide 23: Board of Directors
Board of Directors John Brehmer Charlotta Björnberg- Tone Bjørnov Chariman of the Board Paul Board member since 2015 since 2020 Board member since Current commitments: Board member since 2010 2017 Chairman: Filmparken AS, Storyline Studios AS, Hausmann AS, Dugnad AS Current commitments: Current comm
Slide 24: Executive Management Team
Executive management team Mattias Carlsson Mikael Meomuttel CEO CFO, Deputy CEO and Head of Investor Education: MSc, Engineering Physics, Uppsala University. Relations At TF Bank since 2008 as CEO until 2015, Chairman of the Education: MSc, Business/Economics and Finance, University board between 20
Slide 25: Head of Countries and Functions
Head of countries and functions 1) Vilma Sool Juho Maanpää Juris Pūce Björn Skytt Regional manager Head of Finland Head of Latvia CIO Baltics Extensive consumer Before joining TF Bank Before joining TF Bank Head of Estonia finance experience in in 2016, worked for in 2010 worked as Finland within se
Slide 26: Contact
Contact Investor relations Mikael Meomuttel +46 706 26 95 33 [email protected] www.tfbankgroup.com 26